There is growing concern among individuals in the United States and abroad about identity theft as well as the misuse of personal information. At the same time, businesses are increasingly concerned about fraud and theft. The increasing automation of business transactions has removed many of the cues people use to make judgments about the trustworthiness of those they deal with. Further, the same automation that increases the scope of risky transactions also increases the possible scale of losses; unauthorized or fraudulent transactions can occur more quickly and in more places than before.
Nevertheless, the “looseness” of the current system can also be considered a feature. The same transaction speed that magnifies losses in the event of fraud also magnifies gains in legitimate transactions. Speed and convenience are selling points for each wave of automation—and for most individuals and businesses, the gains have been substantial enough to outweigh the increased risks and the occasional losses.
One way to reduce the chance of losses is to use a reputation-based system. Many examples of these systems exist. For example, an individual's credit rating is a numerical “reputation” by the credit agency concerning that individual's financial condition and past payments on debt. A business may use a Better Business Bureau or TRUSTe seal to make assurances to consumers about the reputation of the company and the security with which customer's data is handled.